WASHINGTON, D.C. – A coalition of Medicaid enrollees, national medical organizations, and municipal leaders has filed a federal lawsuit challenging the Trump administration’s implementation of new Medicaid work requirements.
The legal challenge targets federal regulations governing how states determine exemptions for “medically frail” beneficiaries under the One Big Beautiful Bill Act signed into law last year. While Congress explicitly exempted medically frail individuals from mandatory work, education, or community service hours, plaintiffs argue a rule issued by federal health officials narrows those protections through an unauthorized “back-door” restriction.
Beginning January 1, 2027, new federal and state rules require most able-bodied adults ages 19–64 on Medicaid expansion (such as the Healthy Indiana Plan or HIP) to complete 80 hours a month of work, volunteering, schooling, or job training.
Key Requirement Details
- Monthly Hours: Complete at least 80 hours per month of work, volunteering, approved training, or half-time minimum school enrollment.
- Earnings Alternative: Earn at least $580 per month (the equivalent of 80 hours at the federal minimum wage).
- Timeline: The official start date is January 1, 2027, but a three-month lookback means new applicants must begin fulfilling activities as early as October 2026.
- Reporting: Hours must be logged and managed through the state’s Benefits Portal.
Challenging the “Medical Frailty” Standard
The lawsuit (Taylor et al. v. Kennedy Jr. et al.), filed in the U.S. District Court for the District of Maryland, challenges an interim final rule issued by federal healthcare authorities.
The federal rule specifies categories for medical frailty exemptions, including individuals who are blind, disabled, or dealing with severe physical, developmental, or mental health disorders, as well as complex substance use conditions. However, the lawsuit contends that the administration added an unlawful requirement: enrollees with these conditions must also prove that their diagnoses specifically impair their ability to meet the mandatory 80-hour monthly work or community engagement threshold.
Legal advocates representing the plaintiffs argue that this extra verification step imposes administrative hurdles not written into the original statute.
Jane Perkins, Litigation Director at the National Health Law Program, stated Congress created the medical frailty exclusion to protect people with serious health needs, but the administration’s rule turns that protection into yet another obstacle people must overcome. The statute does not require medically frail people to prove that their conditions are so debilitating that they cannot meet the work requirement.
The lawsuit represents individual Medicaid recipients from five states—Indiana, Illinois, Kentucky, Missouri, and North Carolina—who live with health conditions including HIV, bipolar disorder, autism spectrum disorder, obsessive-compulsive disorder, narcolepsy, and severe visual impairments.
Joining the enrollees as co-plaintiffs are major health institutions and advocacy groups, including:
- American College of Physicians
- American Academy of Pediatrics
- Society for Adolescent Health and Medicine
- Doctors for America
- New Hampshire Medical Society and its AAP Chapter
- City of Columbus, Ohio
The plaintiffs are represented by the National Health Law Program and the Democracy Forward Foundation.
Healthcare providers argue that the administrative burdens associated with continuous re-verification will force physicians into acting as employment evaluators rather than care providers. They warn that procedural errors, missing paperwork, or strict 12-month claims verification limits could leave individuals suffering from cancer, diabetes, and severe behavioral conditions without healthcare access.
Dr. Jan K. Carney, president of the American College of Physicians, stated that the government should not and must not implement policies that place this already vulnerable population at increased risk of interrupted treatment, disrupted coverage, or loss of healthcare access.
Beyond individual health impacts, local government officials caution that the administrative rollbacks will create a financial drain on public safety nets, driving up the cost of care for everyone.
The complaint highlights that when low-income residents lose Medicaid due to procedural paperwork errors, municipal health centers and emergency rooms are forced to absorb the costs of uncompensated care.
Proponents of the One Big Beautiful Bill Act’s provisions maintain that work requirements encourage employment and transition able-bodied adults off public assistance programs. However, public health researchers note that the majority of non-disabled adult Medicaid recipients are already employed or enrolled as full-time students.
This suit in Maryland marks the latest major legal challenge against the federal government’s Medicaid rules ahead of the mandatory state implementation timeline. A separate lawsuit previously brought by 25 state attorneys general (Massachusetts v. Oz) remains ongoing as courts weigh the administration’s regulatory authority.
